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Factors Affecting Customers’ Choice of Retail Banking


  • S Venkata Seshaiah
  • Vunyale Narender


This paper attempts to analyze the factors that affect the choice of customers in choosing the retail banks by the customers. The study involves a survey of 1000 bank customers using questionnaire as the research instrument, augmented with informal interviews of the customers and also makes thorough use of the information available on the internet. In the study, the authors have tried to identify various factors and also analyzed as to which of these factors exert the greatest, moderate and relatively lower influence as choice criteria. It is an attempt to study the consumer behavior with respect to the people’s choice of retail banks. Efforts are made to dwell deep in the psychology by talking to the customers surveyed, whereever possible. The 15 different factors that could be identified, approximately in the order of their importance, are (1) Safety of Deposits, (2) Size and Strength, (3) Accuracy, (4) General Service Quality, (5) Speed of Delivery, (6) Proximity, (7) Security of Environment, (8) Cordiality of Staff, (9) Price and Service Charges, (10) Product Packaging, (11) General Public Impression, (12) Peer Group Impression, (13) Face Lift (Structural), (14) Friendship with Staff and (15) Advertisement and Publicity. According to the findings, based on the empirical study, the first six factors exert the greatest influence, next four have moderate importance, and the rest five have relatively lower influence. Thus, retail banks must reorganize their activities to achieve their corporate mission through customer orientation. In the competitive and capitalistic markets consumer is sovereign and therefore the bankers must reengineer their view and recognize the predilection and tang of the retail customers.

Suggested Citation

  • S Venkata Seshaiah & Vunyale Narender, 2007. "Factors Affecting Customers’ Choice of Retail Banking," The IUP Journal of Bank Management, IUP Publications, vol. 0(1), pages 34-46, February.
  • Handle: RePEc:icf:icfjbm:v:6:y:2007:i:1:p:34-46

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